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Tuesday, 06 September 11
INDONESIAS PROPOSED COAL EXPORT BAN MAY HAVE IMPACT ON THE INDIAN POWER SECTOR - DIPESH DIPU
.jpg) COALspot.com - This is a special interview about Indonesian proposed coal export ban by 2014, with Mr. Dipesh Dipu, Director of Deloitte Touche Tohmatsu, India.
The Indonesian government is currently in the process of drafting a new regulation that could ban the export of low-grade coal by January 12, 2014. This is likely to apply to coal below 5700 kcal/kg on air dried basis in value.
As of now Indonesia is producing around 150 million tons of coal with calorific value below 5700 GAD (according to chairman of Indonesian coal mining association). However by 2014, there are possibilities the total production of below 5700 GAD coal may reach more than 200 million per annum.
Will Indonesian coal export ban impact on the Indian fuel requirements?
The earlier grade of coal that was being considered for proposed ban has GCV of 5100 kcal/kg of less (adb), which can be comparable to 3800-4200 kcal/kg (arb) domestic coal available in India. This grade of coal has found favor in India primarily due to likely price advantage but economics of power generation based on such grade of imported coal may be a suspect. This considering that such grades of coal from Indonesia typically have high moisture content, which makes transportation cost per unit of energy generated higher. The quantum of the low grade of coal (<5100 kcal/kg adb) procured from Indonesia is likely to remain relatively low.
However, if the new definition of low grade coal is applied (<5700 kcal/kg adb), it may be reasonable to believe that such a ban may have impact on the Indian power sector as volumes in this grade of coal are expected to rise in the proportion of coal exports to India. Several of the acquisitions made by Indian power generation companies in Indonesia have been in coal blocks that will produce coal of this grade, and a blanket ban on the exports can jeopardize power plant development in India.
On the other hand, the domestic Indonesian market may not be prepared to consume all the coal mined of this grade in view of the power generation capacity addition plans in Indonesia. In such a case, the coal mine development is likely to be deferred. The Indonesian law makers may need to reconsider domestic market demand, investment climate in coal sector and impact of the legislation on the export revenues.
What is the alternative source for Indian power industry if the proposed coal export ban come into effect by 2014?
Indian power generation companies have been forced to look out for coal assets abroad due to the investment and regulatory environment within the country. India boasts of more than 110 billion tonnes of coal reserves, which largely fall within a 300 meters of depth. If the regulatory and investment environment is amended to allow greater participation of private sector Indian dependence on imports will be reduced.
However, for imports, India will continue to look at Indonesia, South Africa, Australia and newer destinations like Mozambique and Columbia. But these sources also have constraints, domestic demands in South Africa is likely to restrict quantum jump in exports out of South Africa. Indonesia has also proposed domestic market obligations. Mozambique may have infrastructure constraints for large volumes of coal being transported from Tete province to ports of Maputo, Ncala or Beira. Australian coal is of high quality but may have higher costs of mining and transport.
What would be the additional cost if Indian consumers switch their sourcing origin from Indonesia?
Indonesia has competitive advantage due to its geographical closeness. However, on a per tonne basis, assuming comparable quality, costs of transport may make marginal difference when compared with South Africa and Mozambique.
When compared to Australian coal, due to the high quality, cost of energy may well be comparable even though shipping costs are higher. Between Indonesian coal (5500 kcal/kg adb priced at USD 90 per tonne) and Australian coal (6500 kcal/kg adb priced at USD 120 per tonne), indicative variable cost difference of power generation may be about Indian Rupees 0.20 to 0.30 per kWh (electricity unit) in favor of Indonesian coal.
Will it affect Indian economy growth or this coal export ban is ignorable as India can easily identify alternative sources of fuel?
The magnitude of growth in power generation in India will necessarily mean that coal will remain the mainstay. Natural gas has had issues of availability. Nuclear plant development is facing socio-political challenge in view of the risks of technology failure. Development of hydel power has also faced issues of land acquisition, rehabilitation & resettlement apart from the technical issues of hydro-geological features. Renewable sources such as solar and wind generation are still projected to constitute a small portion of India power generation mix. Identifying an alternative source that can match coal in its accessibility, availability and affordability in the context of scale of capacity addition required in India is a challenge.
What is the Indian government's role on this issue, whether government has to come out with the solution such as easing Indian mining and environment law, open up mining for foreigners, G2G arrangement, etc…?
There is a need to look at domestic sources with pro-active and constructive approach and make all necessary legal and statutory amendments that make the resources available and mineable. Easing the regulations may not be one of such measures but making those regulations work in sync with each other in a time bound and predictable manner must certainly be.
There is certainly a case for opening the domestic coal sector for private participation, including independent miners, and for foreign participation so that newer technology and enhanced scale of operations are implemented in India. The regulation also needs to permit risk capital to come in for prospecting and exploration.
For imports the G2G relations can be leveraged to secure coal assets. India has good relationship with Indonesia and has also signed a tax treaty with Mozambique in 2010 which will facilitate investments. Government may also engage with these countries to ease exports to India and extend fiscal support to coal mining companies investing in mining and associated infrastructure development.
About Dipesh Dipu
Dipesh Dipu works as Director with Deloitte Touche Tohmatsu India Pvt. Ltd in the Energy and Resources consulting practice of the firm and anchors the Firm’s initiative in the mining and metals sectors.
He is a mining engineering graduate from Indian School of Mines and is a Chartered Financial Analyst (CFA). He has also done executive program in business management from Indian Institute of Management Calcutta. Dipesh has recently been awarded the Abheraj Baldota Gold Medal for the Young Mining Engineer of the Year 2007 by the Mining Engineers’ Association of India in recognition of his contributions in the improvement of mining industry in India.
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Tuesday, 31 March 20
CHINA TAIYUAN COAL TRANSACTION PRICE INDEX DOWN 0.43 PCT - XINHUA
China Taiyuan coal transaction price index stood at 132.17 points Monday, down 0.43 percent week on week.
The index, released by Chi ...
Tuesday, 31 March 20
COAL POWER REMAINS IN GLOBAL DECLINE, DESPITE CHINESE SURGE - SYDNEY MORNING HERALD
The impact of coronavirus has prompted a surge in coal-fired power plant construction permits in China, with the Chinese government issuing more pe ...
Monday, 30 March 20
CORONAVIRUS - IMPLICATIONS FOR SHIPS AND CREW - GARD
KNOWLEDGE TO ELEVATE
Countries around the world are strengthening their border control measures in order to prevent the further spread of COVI ...
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LAY-UP AND RE-ACTIVATION REVISITED - GARD
KNOWLEDGE TO ELEVATE
The COVID-19 pandemic has affected the maritime industry in previously unthinkable ways. Ports around the world are denyi ...
Monday, 30 March 20
PANAMAX: INDONESIA LACKED VOLUME, PARTLY DUE TO FORCE MAJEURE IN INDIAN PORTS - BALTIC BRIEFING
Capesize
As Covid-19 continued to ratchet up tensions across the globe, the Cape market dealt with the change to remote working. Most regions o ...
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- Borneo Indobara - Indonesia
- Directorate Of Revenue Intelligence - India
- Gujarat Mineral Development Corp Ltd - India
- SN Aboitiz Power Inc, Philippines
- Xindia Steels Limited - India
- GVK Power & Infra Limited - India
- Meralco Power Generation, Philippines
- Australian Commodity Traders Exchange
- Kobexindo Tractors - Indoneisa
- Bukit Baiduri Energy - Indonesia
- Intertek Mineral Services - Indonesia
- Offshore Bulk Terminal Pte Ltd, Singapore
- Cigading International Bulk Terminal - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Bhatia International Limited - India
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Rio Tinto Coal - Australia
- The Treasury - Australian Government
- Deloitte Consulting - India
- Central Electricity Authority - India
- Krishnapatnam Port Company Ltd. - India
- Energy Development Corp, Philippines
- Madhucon Powers Ltd - India
- PNOC Exploration Corporation - Philippines
- Romanian Commodities Exchange
- Aditya Birla Group - India
- AsiaOL BioFuels Corp., Philippines
- Semirara Mining Corp, Philippines
- Indonesian Coal Mining Association
- Savvy Resources Ltd - HongKong
- Sree Jayajothi Cements Limited - India
- Parry Sugars Refinery, India
- Edison Trading Spa - Italy
- Independent Power Producers Association of India
- Tamil Nadu electricity Board
- Siam City Cement PLC, Thailand
- Africa Commodities Group - South Africa
- The State Trading Corporation of India Ltd
- Posco Energy - South Korea
- Aboitiz Power Corporation - Philippines
- Bharathi Cement Corporation - India
- Global Coal Blending Company Limited - Australia
- Kideco Jaya Agung - Indonesia
- Chettinad Cement Corporation Ltd - India
- MS Steel International - UAE
- Karbindo Abesyapradhi - Indoneisa
- Banpu Public Company Limited - Thailand
- Ambuja Cements Ltd - India
- Georgia Ports Authority, United States
- Price Waterhouse Coopers - Russia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Trasteel International SA, Italy
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Sinarmas Energy and Mining - Indonesia
- Thai Mozambique Logistica
- Kumho Petrochemical, South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Sindya Power Generating Company Private Ltd
- Uttam Galva Steels Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Planning Commission, India
- SMG Consultants - Indonesia
- Minerals Council of Australia
- Dalmia Cement Bharat India
- GAC Shipping (India) Pvt Ltd
- Makarim & Taira - Indonesia
- The University of Queensland
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Gujarat Sidhee Cement - India
- Latin American Coal - Colombia
- Bulk Trading Sa - Switzerland
- Parliament of New Zealand
- Antam Resourcindo - Indonesia
- Tata Chemicals Ltd - India
- Bayan Resources Tbk. - Indonesia
- Electricity Generating Authority of Thailand
- IHS Mccloskey Coal Group - USA
- Asmin Koalindo Tuhup - Indonesia
- CNBM International Corporation - China
- Merrill Lynch Commodities Europe
- ASAPP Information Group - India
- Standard Chartered Bank - UAE
- LBH Netherlands Bv - Netherlands
- India Bulls Power Limited - India
- Heidelberg Cement - Germany
- Barasentosa Lestari - Indonesia
- VISA Power Limited - India
- Alfred C Toepfer International GmbH - Germany
- New Zealand Coal & Carbon
- Larsen & Toubro Limited - India
- Central Java Power - Indonesia
- Interocean Group of Companies - India
- TeaM Sual Corporation - Philippines
- Indo Tambangraya Megah - Indonesia
- Power Finance Corporation Ltd., India
- Malabar Cements Ltd - India
- Maheswari Brothers Coal Limited - India
- Essar Steel Hazira Ltd - India
- IEA Clean Coal Centre - UK
- ICICI Bank Limited - India
- Binh Thuan Hamico - Vietnam
- San Jose City I Power Corp, Philippines
- Orica Mining Services - Indonesia
- Renaissance Capital - South Africa
- Wilmar Investment Holdings
- Sojitz Corporation - Japan
- Karaikal Port Pvt Ltd - India
- Gujarat Electricity Regulatory Commission - India
- Videocon Industries ltd - India
- Goldman Sachs - Singapore
- Rashtriya Ispat Nigam Limited - India
- Ministry of Finance - Indonesia
- Ind-Barath Power Infra Limited - India
- Mercator Lines Limited - India
- Commonwealth Bank - Australia
- GMR Energy Limited - India
- Port Waratah Coal Services - Australia
- Baramulti Group, Indonesia
- Pendopo Energi Batubara - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Manunggal Multi Energi - Indonesia
- Agrawal Coal Company - India
- Electricity Authority, New Zealand
- London Commodity Brokers - England
- Star Paper Mills Limited - India
- Mjunction Services Limited - India
- Lanco Infratech Ltd - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Singapore Mercantile Exchange
- Bhushan Steel Limited - India
- SMC Global Power, Philippines
- GN Power Mariveles Coal Plant, Philippines
- Vizag Seaport Private Limited - India
- Attock Cement Pakistan Limited
- Bukit Asam (Persero) Tbk - Indonesia
- CIMB Investment Bank - Malaysia
- Mintek Dendrill Indonesia
- Oldendorff Carriers - Singapore
- Miang Besar Coal Terminal - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Anglo American - United Kingdom
- Pipit Mutiara Jaya. PT, Indonesia
- Holcim Trading Pte Ltd - Singapore
- Vedanta Resources Plc - India
- Therma Luzon, Inc, Philippines
- Thiess Contractors Indonesia
- Bukit Makmur.PT - Indonesia
- PetroVietnam Power Coal Import and Supply Company
- South Luzon Thermal Energy Corporation
- Toyota Tsusho Corporation, Japan
- Carbofer General Trading SA - India
- Neyveli Lignite Corporation Ltd, - India
- Petrochimia International Co. Ltd.- Taiwan
- Australian Coal Association
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Sarangani Energy Corporation, Philippines
- Straits Asia Resources Limited - Singapore
- Maharashtra Electricity Regulatory Commission - India
- Petron Corporation, Philippines
- Kartika Selabumi Mining - Indonesia
- Simpson Spence & Young - Indonesia
- Leighton Contractors Pty Ltd - Australia
- Meenaskhi Energy Private Limited - India
- Siam City Cement - Thailand
- Bhoruka Overseas - Indonesia
- Global Green Power PLC Corporation, Philippines
- International Coal Ventures Pvt Ltd - India
- Kepco SPC Power Corporation, Philippines
- McConnell Dowell - Australia
- Indian Oil Corporation Limited
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- PTC India Limited - India
- Globalindo Alam Lestari - Indonesia
- Formosa Plastics Group - Taiwan
- Sical Logistics Limited - India
- Coal and Oil Company - UAE
- Jaiprakash Power Ventures ltd
- Directorate General of MIneral and Coal - Indonesia
- Iligan Light & Power Inc, Philippines
- Global Business Power Corporation, Philippines
- Altura Mining Limited, Indonesia
- PowerSource Philippines DevCo
- Wood Mackenzie - Singapore
- Coastal Gujarat Power Limited - India
- Coalindo Energy - Indonesia
- Energy Link Ltd, New Zealand
- Timah Investasi Mineral - Indoneisa
- Billiton Holdings Pty Ltd - Australia
- Jindal Steel & Power Ltd - India
- European Bulk Services B.V. - Netherlands
- White Energy Company Limited
- Eastern Coal Council - USA
- Metalloyd Limited - United Kingdom
- Sakthi Sugars Limited - India
- Grasim Industreis Ltd - India
- Riau Bara Harum - Indonesia
- Ministry of Mines - Canada
- Semirara Mining and Power Corporation, Philippines
- Kalimantan Lumbung Energi - Indonesia
- Ceylon Electricity Board - Sri Lanka
- Economic Council, Georgia
- Indogreen Group - Indonesia
- Indika Energy - Indonesia
- Medco Energi Mining Internasional
- Ministry of Transport, Egypt
- Bangladesh Power Developement Board
- Indian Energy Exchange, India
- Vijayanagar Sugar Pvt Ltd - India
- Kaltim Prima Coal - Indonesia
- Orica Australia Pty. Ltd.
- Kohat Cement Company Ltd. - Pakistan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
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